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Mortgages

When do I have to pay back a reverse mortgage loan?

It depends on your situation. Most reverse mortgages today are insured by the Federal Housing Administration (FHA), as part of its Home Equity Conversion Mortgage (HECM) program. A HECM reverse mortgage loan has to be completely paid off when the last surviving borrower dies, sells the home, or permanently moves out. A “permanent move” is defined as living somewhere else for one continuous year. For instance, a borrower who stays in a nursing home or assisted living for more than 12 continuous months has made a “permanent move.” The loan also becomes due if you stop paying your property taxes or homeowner’s insurance, or fail to maintain the property in good repair. For more specifics, look up your situation on this list:

If you are the only borrower on the HECM reverse mortgage loan and:

  • You live alone, your loan will have to be paid off when you die, sell the home, or move out.
  • You live with a spouse or partner, your loan will have to be paid off when you die, sell the home, or move out.
    Warning: If you or your spouse/partner cannot afford to repay the loan from other funds, your spouse or partner will most likely have to move.
  • You live with children, other relatives, or unrelated roommates, your loan will have to be paid off when you die, sell the home, or move out.
    Warning: If you or your heirs cannot afford to repay the loan from other funds, your children, relatives, and/or roommates will most likely have to move.

If you are a co-borrower on the reverse mortgage and:

  • You live alone, your loan will have to be paid off when you die, sell the home, or move out.
  • You live with a spouse or partner, your loan will have to be paid off when both you and your co-borrower have died or moved out. Your co-borrower can continue to live in the home without paying off the loan after you die or move out. Likewise, you can continue to live in the home without paying off the loan if your co-borrower dies or moves out.
  • You live with children, other relatives, or unrelated roommates, your loan will have to be paid off when both you and your co-borrower have died or moved out. If you or your co-borrower is still living in the home, then your children or other relatives can continue to live there too. But when both you and your co-borrower have died or moved out, the loan must be paid off.
    Warning: If you or your heirs cannot afford to repay the loan from other funds, your children, relatives, and/or roommates will most likely have to move.

Note: Usually, co-borrowers are spouses or partners. Co-borrowers are treated the same whether they are spouses, partners, relatives or just roommates.

Important: If you stop paying your property taxes or homeowners insurance, your loan can become due immediately, and the above list does not apply. Learn more about what happens when you don’t pay your property taxes and insurance.

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